High Court stops sale of pirated medical software

9 Jun 2005

In a landmark High Court case, a registered trader has been found to have pirated and sold illegal copies of medical software to several prominent consultants including customers in Beaumont, Charlemont and Blackrock Private Clinics.

In the new commercial division of the High Court, Justice Peter Kelly ordered the medical practice management software package called Prodigium, sold by Nigel Walsh of 38 De Selby Downs, Tallaght, Dublin 24, trading as Hard Data, was actually a copy of the Dynamic Consultant product that was developed by another firm, Medicom.

Walsh, who left Medicom in 2002, was found to have pirated and sold illegal copies of Dynamic Consultant. As many as 30 private medical consultant practices bought Prodigium, unaware that it was an illegal copy. Among the customers affected were consultants in Beaumont, Charlemont and Blackrock Private Clinics as well as others around the country.

As a result of the judgement, copies of the illegal software – including those installed on customer sites – were all destroyed. Justice Kelly also granted a perpetual injunction restraining Walsh, trading as Hard Data, from infringing Medicom’s copyright. The judgements against Walsh for the costs and damages awarded to Medicom amount to €135,000.

Medicom became aware of the unauthorised software by chance when one of the company’s directors attended a medical appointment and saw that the administration software looked almost exactly like Dynamic Consultant – even though the doctor was not a Medicom customer.

On the advice of its solicitors A&L Goodbody, Medicom retained a private investigator who posed as a potential Prodigium customer and bought a copy of the software from Hard Data. On checking a copy of the software, Medicom’s own programming team discovered notes in the code that were identical to those in Dynamic Consultant.

Having engaged a computer forensics expert to support Medicom’s claims, A&L Goodbody wrote to Nigel Walsh asking him to cease his activity. Walsh denied infringing any copyright and claimed instead through his own solicitors that Prodigium was in fact “a completely original work”.

High Court proceedings followed. To resolve the impasse over the origin of the software, Justice Kelly appointed an independent expert, Nick Grattan, to evaluate the Prodigium software and compare it with Dynamic Consultant. Grattan is an expert in Microsoft Access and a well-known figure in the Irish software industry. His report was presented to the court last November and concluded that the copying of Medicom’s Dynamic product was so extensive as to indicate that Hard Data’s Prodigium was a stolen copy of Dynamic that was subsequently modified.

The report found the code layout and formatting was identical between the two products. It also confirmed the company stamp on the Prodigium software read ‘Medicom’. According to Medicom CEO Howard Beggs, one of the unresolved elements of the case is how Walsh was able to obtain a copy of the software in the first place. He also claimed new features added to the Dynamic Consultant package after Walsh left Medicom, also appeared in versions of Prodigium.

Beggs said his reasons for publicising the case were because he wanted to highlight the problem of software piracy and the damage it could cause. “This is a practical example for people who think that software piracy is a ‘soft’ crime,” he told siliconrepublic.com. “Here’s an example of how a small company went through something this damaging. We’re out of product and management time; we had nine outings in court. What should have been time spent developing our product was spent defending our copyright.”

He emphasised the consultants who bought Prodigium were victims who didn’t knowingly receive stolen goods – they bought it thinking they were receiving a cheaper product. A typical three-user installation for Dynamic Consultant costs around €6,000 but documents revealed in court show that Walsh was selling Prodigium for considerably less – just €1,500.

“If we were to do this purely in terms of cost benefit, economically we may not have reaped any rewards, but if we didn’t do it, the cost would have been a lot higher,” Beggs said. He emphasised that protecting the company’s copyright was worth fighting for. “From the point of view of our investors, all we have is our intellectual property, even though it doesn’t have a balance sheet value,” he told siliconrepublic.com.

By Gordon Smith